Spoilage in a Job Order Cost System Attributable to an Internal Failure. Valdeze Plastics Company uses a job order cost system to account for its production costs. During the current period, 1,000 chairs were molded and assembled on job number 9823. The total cost incurred on the job is: LO6 Materials. $12,000 Labor (500 hours x $10 perhour). 5,000 Factory overhead ($20 per laborhour). 10,000 Total cost charged to job number9823. $27,000 Before being transferred to Finished Goods Inventory, the chairs were inspected and 100 were found to be spoiled. The spoiled chairs cannot be reworked because the defects are embedded in the plastic; however, they can be salvaged for $10 each. The company maintains a separate Spoiled Goods Inventory for defective products and charges the unrecoverable cost of spoilage to Factory Overhead Control.

Required: Determine the cost of job number 9823 to be transferred to Finished Goods Inventory and to Spoiled Goods Inventory, and then give the appropriate general journal entry to record the spoilage and the transfers.